As of 16:02 GMT, West Texas Intermediate crude oil futures were 1% lower at $55.17 a barrel on the ICE.
Ahead of data from the American Petroleum Institute (API), an industry trade group, analysts in a Reuters poll forecast US crude stocks declined by 2.2 million barrels last week.
The Paris-based IEA cut its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018.
The scenario will see demand grow from 95.4 million barrels per day, in 2016, to reach 111.1 million barrels per day by 2040, with the global economy growing by an average of 3.5 per cent per year during that time.
"The oil market faces a hard challenge in Q1 2018 with supply expected to exceed demand by 600,000 bpd followed by another, smaller surplus of 200,000 bpd in Q2 2018", the agency said. Meanwhile, U.S. government data showed that production climbed to a fresh record.
"We expect prices to remain soft and move related to any rhetoric that comes out prior to those meetings from all of the involved parties", Adam Wise, who oversees an $8 billion energy portfolio at John Hancock Financial Services Inc in Boston, said by telephone.
Oil market could tip out of balance on rising non-Opec production
Finally, a greater share of shorter cycle investments on the supply side will make it easier for supply "to follow demand quickly and therefore for price to get closer to the cost of the marginal barrel", the IEA explained.
The IEA noted that output by the Organization of the Petroleum Exporting Countries was down by 830,000 bpd year-on-year in October, although demand for the group's crude is expected to fall to 32.6 million bpd in the fourth quarter of this year and to 32.0 million bpd in the first quarter of 2018.
USA crude oil production C-OUT-T-EIA has jumped more than 14 percent since mid-2016 to 9.65 million bpd and is expected to grow further.
The deal expires in March 2018 but Opec will meet on November 30 to discuss policy, and it is expected to agree an extension of the cuts.
"It's started to look like there's a little bit too much momentum, and the quality of the buyer coming into the market at the $56 to $57 level wasn't the smartest crude oil money", said Richard Hastings, macro strategist at Seaport Global Securities in Charlotte.
In May, Opec producers agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.2 million bpd agreed in November a year ago.
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